Why Life Insurance with Living Benefits May Be for You

When most people think of life insurance they think of death insurance, proceeds you have to die for. And since one of the immutable truths of human existence is death, it’s a necessary coverage even if it’s only for last medical expenses and burial costs. But now there is a new twist to an old idea, life insurance with living benefits.

Life insurance with living benefits still pays out the policy’s death benefit and generally tax-free to your beneficiaries, charities or business associates. But life insurance with living benefits can also help retirees with medical costs. Sooner or later most seniors will experience some type of morbidity or illness event during retirement. Even if retirees live in single story homes, with limited or no steps at all, walk-in bathtubs, nonskid tile and support bars, it’s still impossible to anticipate the unforeseen.

The price tag of living longer is getting higher. The cost of defending against future events may be too costly to consider, i.e. long term care individual coverage. Some hybrid products may be suitable for some, but the benefits have to be measured against the internal policy expense loads. Enter the concept of Accelerated Benefit Riders (ABRs) as an ancillary purchase with life insurance.

ABRs are living, supplemental benefits that can provide funding from the policy death benefit, thus the verb ”accelerated” at a discounted rate: Terminal Illness, Chronic Illness, Critical Illness or Critical Injury. Benefit triggers are based on two of the six activities of daily living: Bathing, Continence, Dressing, Eating, Toileting and Transferring. 

Using ABRs could be a strategic part of the defensive side of your finances and/or retirement plan. Having these benefits at the ready could prove to insulate you from economic hardships due to a chronic illness or injury. The terminal illness provision could be a real benefit in your days. Several insurance carriers have entered the marketplace that offer these living benefits. Underwriting is still necessary, but there are some competitive carriers when it comes to adding these benefits onto your policy.

Seek out advice from an insurance professional or retirement specialist to determine if ABRs could be a solution for you and your spouse